GBP/USD Outlook Ahead of BoE Governor’s Speech

Summary:

GBP/USD is trading lower ahead of BoE Governor's speech later in the day. Investors will be keen on his thinking regarding interest rates and the economy.

GBP/USD is trading lower ahead of the speech by Bank of England’s governor Andrew Bailey. The speech, which is scheduled for Wednesday afternoon, will highlight the governor’s thinking on interest rates and the entire health of the UK economy.

The governor speech comes a week after Gertjan Vlieghe noted that the UK central bank may hike interest rates from the beginning of 2022. The member of BoE noted that this scenario will depend on steady economic recovery, strengthening labor market, and lessened wage pressures. The official’s remarks pushed GBP/USD from an intraday low of 1.4092 to 1.4220.

The currency pair is also reacting to the expected reopening of the UK economy on 21^st June. On the one hand, some scientists have indicated that coronavirus remains a key problem for the European country as the Delta Covid variant constitutes 75% of the recorded cases. However, Prime Minister Borris Johnson has maintained that current data shows no reason for delaying the scheduled reopening.

GBPUSD technical outlook

GBP/USD is down by 0.01% at 1.4148. The currency pair is trading lower after hitting 1.4250, which is its highest level since April 2018. On a three-hour chart, the price is below the 25 and 50-day exponential moving averages.

In my opinion, GBP/USD may rise slightly to 1.4175, which is along the 25-day EMA. However, it is likely to experience resistance at this level; pushing it lower to 1.4130 or further down to the psychological level of 1.4100. This thesis will be invalidated by a move above 1.4193.